Like Michelle said, they’ve “just begun.”
(Beltway Confidential) — Earlier, Conn Carroll posted a chart from the Congressional Budget Office that clearly shows spending, not insufficient tax revenue, is the driver of our long-term debt problems. But using CBO data, we can go a bit further. It turns out that even if we brought tax revenues back to the historically high levels that existed at the end of the Clinton era, we’d still wind up with unsustainable deficits using the White House’s own definition of “sustainable.”
In 2000, the last full-year of President Clinton’s administration, tax revenues were 20.6 percent of GDP, according to the CBO. (The White House Office of Management and Budget puts it slightly higher, at 20.9 percent, which places it in a tie with 1944 for the highest ever level in U.S. history). But the CBO’s long-term fiscal outlook released yesterday predicts that by 2035, total spending will reach a stunning 33.9 percent of GDP if lawmakers pursue their predictable course. That means even if revenues returned to the coveted pre-Bush tax cut levels, there would be a 13 percent difference.
Yet President Obama’s former OMB director Peter Orszag has written that, “a sustainable level is more like 3 percent (of GDP) or lower.” So that would put the deficits, even with Clinton-era revenues, at more than four times their sustainable levels.